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07/07/2010

It Actually IS Personal

We talk about aligning the workforce with business strategy but what does that mean? Conversations on this topic typically turn into a discussion around processes, practices and rewards that are supposed to focus the workforce on company objectives. . . but do they really?

We can probably all think of examples when they don't. Generally speaking, strategies fail when they fail to recognize that for most people it's not business, it's personal.

Imagine a company that has clearly communicated goals and rewards for achieving them. At this company, several employee have been invited to interview candidates for a new position. Theoretically, each employee is focused on who would do the best job - and they may actually be focused on that - but there's a personal agenda at work as well.

How does the personal agenda come into play? In the applicant interview scenario, one person may dislike a candidate for a variety of reasons. Another may be friends with a less qualified candidate, or feel threatened by a candidate with competitive skills – even the hiring manager may feel threatened by a high caliber candidate.

Whatever the reason, any of them may subtly influence the decision in favor of someone they like better, or feel less threatened by, than the best person for the job.

Like it or not, personal agendas influence everything from performance evaluations to hiring, promotion, development, salary and even termination decisions. This is not necessarily a bad thing, as long as personal agendas are in harmony with the overall business strategy.

If they aren’t, people may act in subtle ways that work against the company's best interests, even if company goals are clearly communicated and employees are incented to work toward them.

But surely, you say, it’s always in everyone’s best interests to hire the best person. In fact it's irrational not to, since hiring the wrong person may result in less profit, fewer rewards and more work for everyone else.

According to UCSD professor Matt McCubbins, people balance costs and rewards when they make choices, acting in pursuit of their own self-interest. However, when the costs are shared and uncertain and the rewards are personal and immediate, short-term gratification tends to outweigh long-term benefit.

This means that as important as they are - and I think they’re really important - rewards alone are not enough to align the workforce with the strategic long-term interests of the company. In fact, an overly competitive rewards strategy may work against company interests to the extent that people put their own short-term gain ahead of the broader interests of the business.

Personal agendas are a business reality but there are a couple of ways to better harmonize personal agendas with company goals:

Help people make the connection between the interests of the company and their own interests, as I discussed in What’s In It for Them?

Empower people to learn, develop, grow, connect with others, and take on more responsibility.

Empowerment is an essential component of strategic alignment because it allows people to work their own agendas in support of the overall company strategy.*

People are going to work their own agendas anyway. The trick is to tap into all that marvelous, tireless, creative self-interest and get it working for you.

Self-interest can be channeled in different ways: For example, in companies where the greatest rewards go to a select few based on decisions made by others, people tend to interact competitively rather than cooperatively. Whereas in companies where people are encouraged to forge their own path to success, they tend to feel less threatened by others and eager to surround themselves with as many talented people as possible.

In both cases people are acting in accordance with their own self-interest, but with very different outcomes.

The personal agenda is always in the mix when it comes to aligning the workforce with business strategy. The 'art' of workforce alignment is to make the business strategy personal.

*Bersin & Associates published a comprehensive list of empowerment practices that I recommend if you want learn more about empowering your workforce.

Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA. She has nearly fifteen years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University. Her articles and interviews on HCM topics have been published in the US, Europe and Asia. She lives in Munich, Germany and enjoys cooking, reading, writing and spending time with friends and family. You can follow her on Twitter @WorkGal.